Consider the following data,, for the airline industry for April 2019 (EV = enterprise value, Book = equity book value). Suppose Hawaiian Airlines (HA) has 50 million shares outstanding. EstimateHawaiian Airlines' share value using each of the five valuation multiples, based on the median valuation multiple of the other seven airlines shown (excluding Hawaiian Airlines).Calculate Hawaiian Airlines' share values using each of the five valuation multiples below: (Round the median to two decimal places. Round the share price to the nearest cent. Round the EV and market cap tothe nearest integer.)Hawaiian AirlinesMedianImplied EV$Implied market cap. $Implied share price $EV/Sales0.60$$$EV/EBITDA3.4$EV/EBIT4.8$$(---)P/E6.1$$P/Book1.4 Data table(Click on the following icon in order to copy its contents into a spreadsheet.)EnterpriseMarketCapitalization39.057Value (EV)Company NameDelta Air Lines (DAL)American Airlines (AAL)United Continental (UAL)Southwest Airlines (LUV)15,29522,64829,4317,2365,0083,0001,366Alaska Air (ALK)JetBlue Airways (JBLU)SkyWest (SKYW)Hawaiian (HA)Source: Morningstar and Yahoo Finance, April 2019.47,06033,74532,14329,1198,1035,7915,4711,575EV/Sales1.1x0.8x0.8x1.3x1.0x0.8x1.7x0.6xEV/EBITDA6.0x6.3x5.8x6.5x7.7x7.3x6.7x3.4xEV/EBIT8.6x10.5×9.7x8.9x12.3x19.2x11.3x4.8xP/E10.2x11.2x11.0x12.4x16.6x27.7x11.0x6.1xP/Book2.9x1.3x2.3x3.0x1.9x1.1x1.5x1.4xI

Share price: Share price refers to the current value of a single share of a company’s stock,…

Company Name Delta Air Lines (DAL) American Airlines (AAL) United Continental (UAL) Southwest Airlines (LUV) Alaska Air (ALK) JetBlue Airways (JBLU) Market Capitalization 39,057 15,295 22,648 29,431 7,236 5,008 3,000 1,366 Enterprise Value (EV) SkyWest (SKYW) Hawaiian (HA) Source: Morningstar and Yahoo Finance. April 2019. 47,060 33,745 32,143 29,119 8,103 5,791 5.471 1,575 EV/Sales 1.1x 0.8x 0.8x 1.3x 1.0x 0.8x 1.7x 0.6x EV/EBITDA 6.0x 6.3x 5.8x 6.5x 7.7x 7.3x 6.7x 3.4x EV/EBIT 8.6x 10.5× 9.7x 8.9x 12.3x 19.2x 11.3x 4.8x P/E 10.2x 11.2x 11.0x 12.4x 16.6x 27.7x 11.0x 6.1x P/Book 2.9x 1.3x 2.3x 3.0x 1.9x 1.1x 1.5x 1.4x

Company Name Delta Air Lines (DAL) American Airlines (AAL) United Continental (UAL) Southwest Airlines (LUV) Alaska Air (ALK) JetBlue Airways (JBLU) Market Capitalization 39,057 15,295 22,648 29,431 7,236 5,008 3,000 1,366 Enterprise Value (EV) SkyWest (SKYW) Hawaiian (HA) Source: Morningstar and Yahoo Finance. April 2019. 47,060 33,745 32,143 29,119 8,103 5,791 5.471 1,575 EV/Sales 1.1x 0.8x 0.8x 1.3x 1.0x 0.8x 1.7x 0.6x EV/EBITDA 6.0x 6.3x 5.8x 6.5x 7.7x 7.3x 6.7x 3.4x EV/EBIT 8.6x 10.5× 9.7x 8.9x 12.3x 19.2x 11.3x 4.8x P/E 10.2x 11.2x 11.0x 12.4x 16.6x 27.7x 11.0x 6.1x P/Book 2.9x 1.3x 2.3x 3.0x 1.9x 1.1x 1.5x 1.4x

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 88PSA: Ratio Analysis Consider the following information taken from the stockholders equity section: How do...

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